important notice · this presentation is based on guaranty trust bank’s audited financial results...

Important Notice

This presentation is based on Guaranty Trust Bank’s audited financial results for the Half-year period ended June 2013, consistentwith IFRS reporting standards. Guaranty Trust Bank Plc (“GTBank” or the “Bank”) has obtained some information in thispresentation from sources it believes to be reliable. Although GTBank has taken all reasonable care to ensure that the informationherein is accurate and correct, GTBank makes no representation or warranty, express or implied, as to the accuracy, correctnessor completeness of such information.

Furthermore, GTBank makes no representation or warranty, express or implied, that its future operating, financial or other resultswill be consistent with results implied, directly or indirectly, by information contained herein or with GTBank’s pastoperating, financial or other results. Any information herein is as of the date of this presentation and may change without notice.GTBank undertakes no obligation to update the information in this presentation. In addition, some of the information in thispresentation may be condensed or incomplete, and this presentation may not contain all material information in respect ofGTBank.

This presentation also contains “forward-looking statements” that relate to, among other things, GTBank’splans, objectives, goals, strategies, future operations and performance. Such forward-looking statements may be characterised bywords such as “estimates,” “aims,” “expects,” “projects,” “believes,” “intends,” “plans,” “may,” “will” and “should” and similarexpressions but are not the exclusive means of identifying such statements. Such forward-looking statements involve known andunknown risks, uncertainties and other important factors that could cause GTBank’s operating, financial or other results to bematerially different from the operating, financial or other results expressed or implied by such statements. Although GTBankbelieves the basis for such forward-looking statements to be fair and reasonable, GTBank makes no representation orwarranty, express or implied, as to the fairness or reasonableness of such forward-looking statements. Furthermore, GTBankmakes no representation or warranty, express or implied, that the operating, financial or other results anticipated by such forward-looking statements will be achieved. Such forward-looking statements represent, in each case, only one of many possiblescenarios and should not be viewed as the most likely or standard scenario. GTBank undertakes no obligation to update theforward-looking statements in this presentation.

2

Outline

2. Regulatory overview

PAGE

5

SECTION

3. Half-year, June 2013 results overview 6

4. GTBank UK 15

5. Conclusion 16

1. Macro economic overview 4

3

Macro Economic OverviewContinued economic growth and stability

• Second largest GDP in Sub-Saharan Africa (after South Africa “S.A.” ):

• 2012 GDP: Nigeria - $268.7bn/ S.A. - $384.3bn

• 2012 Real GDP growth rate: Nigeria – 6.33% / S.A. – 2.55%

- (IMF World Economic Outlook forecast)

• GDP growth increasingly driven by non-oil sector

• Currency

• The Naira has remained relatively unchanged at N157.31/USD at the CBN window

• At the interbank, the Naira opened the year 2013 at ₦156.22/USD and closed at ₦162.58/USD in June resulting in a 3.91% depreciation

• Foreign Exchange reserves grow by over 8% in 2013

• Foreign exchange reserves grew from $44.3bn in January 2013 to $48.0bn in June 2013

• Strong growth in reserves expected to continue in 2013

• Improving inflation

• Inflation continues downward trend with single digit inflation expected to prevail in 2013 - CPI at 8.4% year on year in June

• Oil prices & production

• Oil prices at $103.51/barrel in June 2013, down from $113.01/barrel average over 2012

• Non oil sector growth expected to partially supplement decrease in oil revenues

• Improving Economic profile

• Government driving several developmental policies and reforms ahead of 2015 elections

• Majority of current regime’s reforms and policies e.g. Power, Agriculture, expected to be instituted this year

4

GDP Growth and Inflation

Interest Rates

Exchange Rate and Crude Oil Price per Barrel

4

154.4 153.3155.7 157.9 157.4 157.4 157.3 157.3 157.3

117 115.7 111.5

125.4

98.33

113.42 112.72

113.09

103.51

80.0

90.0

100.0

110.0

120.0

130.0

140.0

150.0

160.0

170.0

2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2

NGN/USD period average Bonny Light Crude Oil (USD/barrel)

Source: The Central Bank of Nigeria, Bloomberg

6.96%7.50% 7.37%

7.76%6.34% 6.39% 6.48% 6.99%

6.56%

11.7%

14.1%15.0%

13.9%

11.8%

12.9%

11.3%12.0%

8.6%

5.5%6.5%7.5%8.5%9.5%

10.5%11.5%12.5%13.5%14.5%15.5%

2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1

Real GDP Growth Inflation (year on year)

8.2%8.9%

14.3% 14.5%14.1%

12.8%11.8%

10.2%11.6%

4.5%

4.7% 6.6%7.5% 7.5% 7.9% 8.2% 8.0% 7.6%

12.8% 12.3%

15.3%16.2% 16.0%

12.9% 13.0%

10.9%11.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2

Treasury Bill Rate 1 Month Deposit Rate 30 Day NIBOR

Source: Central Bank of Nigeria

Regulatory Overview

Regulatory Pronouncement Effective Dates Rationale

1

The MPC introduced a 50% Cash Reserve Ratio (CRR) on public sector deposits to be applied on Federal, State and Local Government deposits and all MDAs. CRR on all otherdeposits to remain at 12%.

Effective August 2013 To reduce perceived excess liquidity in the banking system with an aim to promote price stability and curb inflation.

2The “Cash-less” Policy to be extended beyond Lagos to a further five states: Abia, Anambra, Kano, Ogun, Rivers and Abuja.

Effective July 2013 To increase transparency and improve payments systems

3

Extension of the N150,000 limit on over the counter cashing of 3rd party cheques from Lagos to all bank branches nationwide.

Effective June 2013 To reduce the occurrence of fraud on cheques and to aid the National Financial Inclusion (NFI) strategy.

4

Inclusion of a 150% risk weight for exposure to a particular industry within a sector in excess of 20% of total bank credit facilities.

Effective January 2014 To reduce the excessive concentration of credit in the asset portfolios ofbanks.

5

• AMCON Sinking Fund Contributions: Annual contribution increased from 0.3% to 0.5% of total bank assets.

• 331/3 of contingents to be subject to AMCON Charge

Effective 2013 To ensure that liabilities can be repaid as they fall due.

5

Financial Highlights (Group)

Key Financials (N'000) - Group 31-Dec-11 31-Dec-12 30-Jun-12 30-Jun-13

Balance Sheet

Total Advances and Loans to Customers 706,893,133 779,050,018 794,700,467 894,862,976

Total Advances and Loans to Banks 158,616 4,864,824 2,455,770 4,143,418

Total Deposits from Customers 1,026,119,419 1,148,197,165 1,058,892,566 1,254,445,308

Total Deposits from Banks 37,229,029 23,860,259 13,268,619 17,657,973

Shareholders' Funds 230,393,154 283,441,120 252,179,044 296,949,381

Total Assets 1,608,652,646 1,734,877,860 1,595,676,984 1,860,494,404

Profit and Loss Account 12 months 12 months 6 months 6 months

Interest Income 126,471,509 170,295,193 83,176,926 92,000,395

Non-Interest Income 55,937,053 51,644,888 30,349,576 32,201,968

Profit Before Taxes 62,080,206 103,027,923 53,636,084 57,364,487

Profit After Taxes 51,741,620 87,295,957 45,551,716 49,014,861

Performance Ratios

Return on Average Assets (RoAA) 3.73% 5.22% 5.45% 5.45%

Return on Average Equity (RoAE) 23.15% 33.98% 35.46% 33.78%

Net Interest Margin 8.20% 9.46% 8.26% 8.56%

Cost/Income 52.94% 42.73% 41.40% 42.02%

Balance Sheet Ratios

Loans Deposits 66.49% 66.88% 74.35% 70.67%

Liquidity Ratio 52.65% 53.32% 43.83% 48.80%

Capital Adequacy Ratio 20.68% 24.23% 21.55% 21.53%

Asset Quality Ratios

NPL/Total Loans 3.45% 3.43% 3.33% 3.41%

Cost of Risk 2.76% 0.10% 0.31% 0.15%

Provisions for Loan Losses/NPL 102.24% 69.90% 86.97% 64.60%

56.58%

18.93%

3.83%

13.93%

6.74%

PBT

InstitutionalRetail

Public Sector

SME

Commercial

58.41%23.73%

2.23%

7.98%

7.66%

Loans

Public Sector

Business Segmentation

•Focus on:

•Federal government

•State governments

•Local governments and clients

•Active in all government segments

Institutional Commercial Retail Public Sector

GTBank

•Deposit drive focus for retail customer-base

•Rapidly developing business line

•212 branches, 50 e-branches & 996 ATMs

•Extensive leverage of all distribution channels

Over 400 clients Over 50,000 Clients Over 4 million All Tiers of Government

Client Base Client Base Client Base Client Base

•Comprised of small and medium enterprises

•Products tailored to cater to small, fledgling and other types of fairly unstructured businesses

SME

Over 200,000 clients

Client Base

7

InstitutionalCommercial

SME

Retail

23.98%

18.47%

8.78%

38.17%

10.61%

Deposits

Public Sector

Institutional

Commercial

Retail

SME

•Multinationals and large corporates, with turnover in excess of ₦5bn.

•Comprised of six sectors:•Energy, •Telecoms, •Maritime, •Corporate Finance, •Corporate Banking, and Treasury

•Middle market companies, with turnover between ₦250m and ₦5bn

•Extensive product range: tailor-made solutions and flexibility

•Custom E-commerce solutions

International DistributionGTBank Gambia• Established in 2002• 2nd Bank subsidiary• 77.81% owned by parent• 16 branches• ₦574.28mm invested by parent• H1 2013 PBT: ₦345mm

GTBank Sierra Leone• Established in 2002• 1st Bank Subsidiary• 84.24% owned by parent• 12 branches• ₦594.11mm invested by parent• H1 2013 PBT: ₦542mm

GTBank Ghana• Established in 2006• 3rd Bank subsidiary• 95.33% owned by Parent• 24 branches• ₦8.57bn invested by parent• H1 2013 PBT: ₦2.52n

GTBank UK• Established in 2008• 4th Bank subsidiary• 1 branch• 100% owned by Parent• N7.82bn invested by parent• H1 2013 PBT: ₦20mm

GTBank Liberia• Established in 2009• 5th Bank subsidiary• 6 branches• 99.43% owned by parent• ₦1.95bn invested by Parent• H! 2013 PBT: ₦176mm

GTBank Cote D’Ivoire• Established in April 2012• 6th Bank subsidiary• 1 Branch• ₦3.49bn invested by parent• 98.98% owned by parent• H1 2013 PBT: ₦(158mm)

GTBank PLC• Parent Company• Established 1991• 216 branches, 50 e-branches• ₦296.95bn in shareholder’s funds• H1 2013 PBT: ₦54.44bn

Short term points of interest

KenyaGDP growth:5.1%GDP per capita: $993Inflation: 9.6%Population 42.1mTele-density: 72 per 100Investment (% of GDP): 22.3%

RwandaGDP growth:7.7%GDP per capita: $693Inflation: 9.2%Population : 10.4mTele-density: 50 per 100Investment (% of GDP): 22.9%

UgandaGDP growth:4.2%GDP per capita: $574Inflation: 14.6%Population 35.6mTele-density: 48 per 100Investment (% of GDP): 26.9%

8

Profitability (Group)

9

Annualized Returns on Average Assets/ Equity (ROAA/ROAE)

Half Year Profits before tax [N’bn]Consistent dividend payments

Strong H1 profits

• Strong H1 PBT of N57.36bn, up 6.95% compared to June 2012 (N53.64bn)

• Strong half year ROAE of 33.78% and ROAA of 5.45% (annualized)

• Earnings per share of N1.73

• 2013 Half year dividend of 25k per share

• Growth in profitability driven by

• Growth in quality risk assets

• Yields on fixed income securities

• Fx appreciation gains

• Cost control

3.73% 5.22% 5.45% 5.45%

23.15%

33.98% 35.46% 33.78%

Dec-2011 Dec-2012 Jun-2012 Jun-2013

ROAA ROAE

1.001.10

1.55

0.25

61% 65%51%

Dec 2010 Dec 2011 Dec 2012 Jun 2013

Total Dividends Payout ratio

25.7232.91

53.64 57.36

Jun-10 Jun-11 Jun-12 Jun-13PBT

- Interest Income

126.47 170.30

83.18 92.00

55.94

51.64

30.35 32.20

Dec-11 Dec-12 Jun-12 Jun-13

Profit Drivers – Revenues

Strong revenue Revenue mix [N’bn]

Interest income [N’bn] Non-interest income [N’bn]

• Growth in revenues sustained by growth in loanbook, trading income and yields on investment securities.

• Interest income up 10.61% (compared to June 2012)Growth in net interest income dampened by tight liquidity(Naira) and the impact of the new banker’s tariff on savingsdeposits.

• Non-interest income up 6.10% (compared to June 2012)Growth in non-interest income dampened by the impact ofthe new banker’s tariff on commissions and fees chargeableby banks.

- Non-interest Income

182.41

221.94

113.47124.20

69.33%

30.67%

76.73%

23.27%

73.27%

26.73%

74.04%

25.93%

10

69.97% 67.09% 66.94% 61.59%

21.88% 29.77% 29.72% 36.17%

8.15% 3.13% 3.34% 2.24%

Dec-11 Dec-12 Jun-12 Jun-13Loans and Advances Investment Securities Placements

77.80% 85.82% 81.74% 77.78%

12.23%7.63% 9.82% 10.92%

9.97% 6.55% 8.43% 11.29%

Dec-11 Dec-12 Jun-12 Jun-13Fees and Commissions Net gains/(losses) on "held for trading" Other income

92.0083.18170.30126.47 32.3030.3551.6455.94

Profit Drivers – Cost Base

Continued focus on efficiency Cost-to-Income ratio

Expense overview Operating expenses [N’bn]

• Cost-to-Income ratio of 42.02%

• Conservative 9.65% growth in operating expenses from H12012, despite 95.32% increase in AMCON expenses as aresult of the effects of an upward review of the AMCON levyto 50bps of Total Assets on a larger balance sheet.

• AMCON levy constitutes 9.72% of total operating expenses

• 24.89% growth in interest expense over H1 2012 areflection of a increased competition, regulatory minimuminterest rate payments on savings deposits and bouts ofmarket illiquidity.

• GTBank will continue to grow its retail deposit base andseek low cost, stable funding.

69.15 76.08 37.27 41.16

11

52.94%42.73% 41.40% 42.00%


58.37% 64.47% 62.91% 61.96%

23.62%33.56% 31.70% 35.32%

16.46%0.63% 4.07% 1.98%1.55% 1.35% 1.32% 0.74%

Dec-11 Dec-12 Jun-12 Jun-13Operating Expenses Interest expenseLoan impairment Fee and Commission Expense

32.36% 34.13% 27.90% 26.67%

31.27% 29.45%29.77% 28.75%

25.37% 24.74% 31.09% 32.67%

11.00% 11.69% 11.24% 11.91%


Personnel Exp. G & A Exp Other Op-Ex Dep. and Amort.

Balance Sheet Mix

Balance sheet Total Assets, Loans and Deposits [N’bn]

Asset base and components [N’bn] Low cost, diverse funding mix [N’bn]

• Loans to deposits ratio: 70.67%

• Total net Loans of N899.00bn, up 14.68% from December 2012

• GTBank continues to maintain a focus on the high-endinstitutional client-base, hence 58.41% of the bank’s loan-bookis in the institutional banking segment

• Liquidity ratio – 48.80%

• GTBank is well positioned to take advantage of businessopportunities that may arise in the short to medium term.

• Total Deposits of N1.27trn, up 8.54% from December 2012

• GTBank continues to focus on maintaining balance sheetefficiency and protecting NIMs

Dec-10 Dec-11 Dec-12 Jun-13

604 707 784

899 779

1,063 1,172

1,272 1,168

1,609 1,735

1,860

Net Loans Deposits Total Assets

12

66.70% 66.10% 67.56% 68.37%

7.70% 14.86% 10.35% 9.90%6.74%4.49% 5.76% 5.76%

18.86% 14.55% 16.34% 15.96%


Total Deposits Borrowed funds & debt sec. other liabilities Equity

1,168.05 1,608.65 1,734.88 1,860.491,168.05 1,608.65 1,734.88 1,860.49

51.72% 43.95% 45.19% 48.32%

23.38%22.89% 18.62% 12.49%

2.87% 13.09% 10.17% 23.91%12.75% 10.77% 15.62% 1.67%9.29% 9.29% 10.40% 13.60%

Dec-10 Dec-11 Dec-12 Jun-13Net Loans Cash and equiv. Inv. Sec. & pledged assetsFin. Assets for trading Other Assets

Net Interest Margins

13

Strong margins History of strong NIMs

Yields on interest earning assetsCost of interest bearing liabilities

• NIM of 8.56% ( Dec 2012 – 9.46%)

• NIM remains relatively strong despite slightcompression from 2012 NIM levels

• NIM compression from 2012 reflects a drop in yieldsand rise in cost of funding (impact of new banker’stariff and general rise in costs and competition) 8.21% 8.20%

9.46%

8.56%


3.20%

2.50%

3.10%3.30%


11.01%

10.44%

12.31% 12.20%


Asset Diversification & Quality

NPLs by IndustryLoans by Industry

NPLs, Coverage, COR NPLs and coverage

• NPL ratio - 3.41% (Dec 2012 – 3.43%)

• Coverage

• Without regulatory risk reserves – 64.60%

• With regulatory risk reserves – 108.30%

• Cost of risk - 0.15% (Dec 2012 – 0.10%)

• Information, Telecoms and transport accounts for 36.50%of NPLs with Hi Media accounting for the bulk of it.

69.9%102.3%75.64%

Coverage ratio

Capital Markets0%

Agriculture1%

Education1%

Individual5%

General Commerce

7%

Construction9%

Government9%

Others10%Telecoms and

transportation15%

Manufacturing19%

Mining, Oil & Gas24%

64.60%

14

MINING, OIL & GAS2%

AGRICULTURE3%

CAPITAL MARKET &

FIN. INSTITUTION

3%

OTHERS4%

GENERAL COMMERCE

10%CONSTRUCTION & REAL ESTATE

10%

MANUFACTURING31%

INFO. TELECOMS & TRANSPORT.

37%

6.74%

3.45% 3.43% 3.41%

1.68%

2.76%

0.10% 0.15%


NPL/Total Loans Cost of Risk

GTBank UK

What happened• GTBUK was fined by the FCA for “breaches of Principle 3

(management and control) of the Authority’s Principlesfor Businesses between 19 May 2008 and 19 July 2010;

• The infractions occurred in the period in which GTBankUK commenced operations as a new firm in the U.K.;

• GTBank UK was deemed to have failed to establish andmaintain effective AML controls in relation to high riskindividuals and Politically Exposed Persons (PEP);

GTBank’s position• GTBank UK co-operated fully with the FCA during its

investigation;

• The said infractions occurred when GTBank UK wasstarting its operations and developing thesystems/processes required to meet the operatingrequirements of the new business environment;

• The FCA found no evidence that GTB UK did in fact handleany proceeds of crime

• All fines levied have been paid by GTBank UK and havebeen taken in the first-half of 2013;

• GTBank UK’s operations are ring-fenced;

• GTBank has since invested heavily in improving AMLsystems and controls

Measures taken1. Since 2011, the following management changes were

effected to strengthen GTBank UK’s operations:a) Change of Head of Risk, andb) Change of Head of Compliance;

2. GTBank UK’s new head of Compliance is experienced withregulations and requirements as it relates to bankingoperations, AML and other operating requirements for UKbased financial institutions.

3. In 2011, GTBank UK engaged an AML Consultancy firm (CraigBrook), to review existing systems and procedures in GTBankUK and confirm strict adherence to internal SOPs and FCArequirements. The lessons learnt from this exercise arebeing applied across board in all of GTBank’s businesslocations.;

4. An annual AML review process has been instituted. Aleading AML consultancy firm is being engaged for this year’sexercise to carry out a compliance review and reconfirmstrict adherence to FCA requirements and the full adoptionof the compliance measures/changes put in place since2011;

5. GTBank UK no longer opens PEP accounts. Overall, GTBankremains committed to a higher level of corporategovernance and compliance with the regulatoryrequirements of the various jurisdictions in which it operates

FCA fines GTBank UK, £525000 for inadequate money laundering checks

15

Business Strategy and Objectives

Overall Aspiration

Our Strategic

Pillars

Enablers

To be one of the top three banks in Africa

by 2016 (absolute profitability)

African Expansion

Enhanced Risk Management

Talent Management & Leadership

Leverage Technology Competitive Cost Containment

Dominate our chosen markets

Scale up our franchise in Africa

Aggressively grow market share in our chosen/priority sectors

Continue to win on the basis of cost

Strong risk management practices with deep

competencies in our key markets

Knowledgeable and highly driven staff with deep industry skills

Scalable, fit for purpose technology platform

Deep Market Knowledge Products and Solutions Strategic Relationships

COMPASS STATEMENTS

16

-Thank You-

17

important notice · this presentation is based on guaranty trust bank’s audited financial results...

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